Former CEO of US-based Brocade gets prison sentence

The former chief executive of US-based Brocade Communications Systems was sentenced to 21 months in prison for orchestrating a scheme to tamper with the company's records of stock option grants, an Associated Press report said.

Gregory Reyes, Brocade's CEO from 1998 to 2005, was also ordered to pay a $15 million fine,the Associated Press report said.

US District Judge Charles Breyer was quoted by the report as saying that Reyes obstructed justice in preparing for trial, which led to a stiffer sentence.

'This offense is about honesty,' Breyer said. 'Every time Gregory Reyes falsified documents, repeatedly, over a three-year period, he was lying. That is the core of the defendant's criminal conduct.'

Reyes was the first executive to be tried over stock options backdating when his case went before a federal jury in San Francisco in June 2007. He was convicted in August of 10 counts of securities fraud.

At least a dozen other executives have been criminally charged for options dealings in a sprawling probe that rattled corporate America and revealed widespread mishandling of a common tool used to recruit and retain workers.

The San Jose-based company, which makes switches that connect companies' servers to their data storage systems, wiped out hundreds of millions of dollars in previously reported profits from 1999 to 2004 after the inaccuracies came to light, the report further said.

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